Emerging Stocks Rise Seventh Day as Russia to Iraq Tensions EaseNatasha Doff and Priyanka Sharma
Emerging-market stocks climbed for a seventh day as tensions in Russia and Iraq eased and U.S. housing starts rose.
The MSCI Emerging Markets Index added 0.7 percent to 1,084.36. Lender Akbank TAS led a second day of gains in the Borsa Istanbul 100 Index. The Micex index extended the longest stretch of advances since Sept. 11 as OAO Moscow Exchange rose to as six-week high. Lender Itau Unibanco Holding SA led Brazil’s Ibovespa higher.
Data today showed U.S. housing starts surged in July to the highest level in eight months, underscoring the recent pickup in builder optimism as the residential real-estate market gains some traction. The Red Cross said it is close to working out details of a safe-passage plan for a Russian aid convoy in southeastern Ukraine, while Kurdish and Iraqi forces seized control of Iraq’s largest dam from Islamic State militants.
“Some of the geopolitical tensions which had rattled the markets over the last couple of weeks seem to be easing, with regards to Ukraine in particular,” William Jackson, an economist at Capital Economics Ltd., said by phone from London. Turkey is seeing a “relief rally” after underperforming since presidential elections won by Recep Tayyip Erdogan, he said.
The developing-market gauge has increased 8.2 percent this year and is valued at 11.3 times projected 12-month earnings, the most expensive level since April 2011, according to data compiled by Bloomberg. The MSCI World Index has gained 4.4 percent in 2014 and trades at a multiple of 14.9.
The Micex rose 0.9 percent today to the highest since July 17. OAO TMK jumped 2.2 percent as OAO Rusnano said it plans to buy new shares issued by the steel pipe producer. The ruble fell 0.3 percent versus the dollar.
Ukrainian government forces have taken control of one of four districts in the pro-Russian separatist stronghold of Luhansk and are fighting in the city center, a military spokesman said.
Turkey’s Borsa Istanbul 100 Index surged 2.5 percent, the best performance among major emerging-market benchmarks. Akbank soared 4.6 percent, the most since April.
The gauge fell 3.2 percent last week, the third consecutive drop for the period, while the lira lost 1 percent. Erdogan, who must step down as premier when he’s sworn in as president Aug. 28, has pressured the central bank to cut interest rates.
The Ibovespa advanced 1.5 percent in Sao Paulo. Itau gained 3.4 percent. Steelmaker Cia. Siderurgica Nacional SA jumped 2.3 percent after saying it will extend a share buyback program.
All 10 industry groups in the emerging-market measure increased, led by a 1 percent advance in a gauge of energy companies. The premium investors demand to own developing-country debt over U.S. Treasuries declined four basis points to 284, according to JPMorgan Chase & Co. indexes.
The Shanghai Stock Exchange Composite Index increased 0.3 percent. Equity indexes in South Korea and the Philippines climbed at least 0.7 percent. India’s S&P BSE Sensex Index gained 0.1 percent.